GM isn’t going to break itself up — yet (GM)

  • GM CEO Mary Barra was asked by Morgan Stanley’s Adam Jonas if spinning off new businesses is under consideration.
  • Barra deflected the question.
  • GM thinks its current structure is best for scaling up self-driving cars.

General Motors reported third-quarter earnings on Tuesday, beating Wall Street expectations

On a conference call with analysts after earnings were announced, Morgan Stanley’s Adam Jonas returned to a theme he has frequently explored as GM has developed new lines of business in self-driving vehicles and ride-hailing/sharing services.

Jonas thinks GM might be well-served by spinning off these operations to unlock value for shareholders; his inspiration is Fiat Chrysler Automobiles’ exceptionally successful 2015 IPO of Ferrari, with stock of the Italian supercar company up 95% in 2017.

GM CEO Mary Barra deflected Jonas’ questions about establishing new “legal entities.” She said that GM was committed to achieving a “first mover” status with its new autonomous vehicles and that it intends to deploy new products “at scale.”

She also noted that GM is currently orchestrating operations from Michigan to Israel to Canada and San Francisco, and for the moment the automaking giant needs to keep everything under one roof.

But she didn’t rule out future spinoffs. She said that later GM would determine the best structure to return value to shareholders.

So GM won’t be breaking itself up anytime soon — despite Wall Street’s enthusiasm for the idea.

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